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Worldwide tax system baffles me


King

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Yup it baffles me. Now if you look at taxation system in any country they tax the most capable, able and the ones that earn the top dollars. Is that their mistake they are smarter and more enterprising than the average population. I don't mind seeing corporate taxed fair bit but an individual is taxed inappropriate proportions with each climb up the ladder. Look at the ones that don't really earn as much, they are taxed less. Simply because they didn't educate themselves well enough or were not enterprising enough to keep excelling in their respective careers. That simply means mediocrity is rewarded while exceptional talents are taxed simply because they are exceptional. Shouldn't it be the other way around if you apply a little logic? I know people will mention the gap between rich and poor, yada, yada, yada. I can understand if socio-economic conditions didn't let people excel but the ones that had no such issues but failed to excel are rewarded for mediocrity. Picture this, a very organized blue collar job holder earns about 120k. He has couple of kids and his wife is happy not to work and concentrates on rather bringing up the kids. This ensure the kids have a good support at home to fall back on and excel in education as well as sports thanks to all the support they get at home. Now the salary earner here is taxed about 40% of his salary over and above 60 k. He pays the round about 40k as tax. The salary earner put in a lot of effort to reach where he is right now. He educated himself well and did the hard mile. You have another family with the couple working at nearby supermarket and both earn to the tune of about 60k each. Now the tax system taxes the couple to the tune of about 30 k. The couple didn't really put in any extra hard work to reach where they are. How is this fair for the well learned and the exceptional? In short the tax system taxes Einstein more than the gardener :shrug: Does that sound about right? Was it Einstein's mistake he grew up to be super smart and he is being pinged for this? I'm certainly not convinced about the tax system and I guess every tax system is a prototype of an original tax system that was flawed in the first place.

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Re: Worldwide tax system baffles me I just have a couple of contentions regarding the points you make.. "The salary earner put in a lot of effort to reach where he is right now. He educated himself well and did the hard mile. " - What do you mean by the term hard mile ? getting a tech degree so that he gets a tech job ? If salaries were to be based purely on number of hard hours put into work , then the average indian labourer would earn more than American blue collar worker. So we should define what hard work means first, before we get into this debate of who works hard and who works less. As much as intellecutual ability must be respected for what it gives to the society , we should understand that unskilled labourers contribute as much as others do in keeping this world moving. And this slabbed tax system of More-you-earn-the-more-we-tax is not to deprive people of what they deserve, but its more to take money from where there is and put it into where there isnt. The tax money you pay helps keep govt social security going. Makes sure the schools are run and people are educated. If rich people arent taxed as much they are now , govt schemes will break down. Public investment will fall . Consequently , living standards of the poor will get worse , education will be hit and therefore crime will increase. So not only are we paying for other' welfare but indirectly to ours also. And its not question of who gets the most when it comes to taxes, its more about who suffers the least. Taking your own exmple , the guy with the $120 k job will be left with $80 per year to sustain his family. That would be enough for him to maintain a decent standard of living and savings profile. But what if the guy earning $60 k per year were taxed the same 40%. He would be left with 35 k to run his entire family for the year. That simply isnt enough. So equal tax rates will hurt the poor more than it does to the rich .

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Re: Worldwide tax system baffles me Ravi... there is something like social responsibility.... wat if the armymen complained about why he needs to risk his life for us guys, while we do nothing for them... even the army guys pay taxes... as a country, we are supposed to contribute to ur country's wealth... and everything we get is also from the country... so the more u get, the more u pay.... this country can provide only so much opportunity for the gardener for his ability and skill.... and he can only provide so much as tax....and so on...

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Re: Worldwide tax system baffles me why pay someone more just because they happen to be born intelligent or happen to have parents who send you to good school or happen to not be raised in a ghetto? pay everyone the same for each hour worked and everyone will end up paying the same taxes. not that i am advocating it, but if you want to bring about true equality that's one way to achieve it.

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Guest dada_rocks

Re: Worldwide tax system baffles me

quite simply put ... its much harder to go from bottom to top than the other way ... I know its crude ..but thats the reality.
In enginnering for system staility they have negative feedback if by mistake u get phase-shift wrong and it ends up being positve feedback u get oscillation. Tax system tries to pre-empt this eventuality of unstable oscillating system i.e civil war. As BB mentioned it's harder to go from bottom to top than other way so if measure to the effect which aids the weaken sections is not in place eventually u will get situation where only few will control everything. Like what you see in Pakistan particularly apropos land holding: as of today 80+% of cultivated land is under possession of couple of thousand of Chuadhari Wadhera Tribal heads etc etc. One might ask how come Pakistan is not facing civil war in that case, well they have artificial stability in place due to ridiculously jumbo size army for its size. Anyway, if u did ur schooling in India u have to be socialist in outlook because u got virtually free education. U owe it to society.
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